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A look at Health Canada cultivation licenses issued

Each week, Business of Cannabis delivers a series of insights from our partners at Cannabis Benchmarks®.

The Canada Cannabis Spot Index was assessed at C$5.86 per gram this week, down 1.2% from last week’s C$5.93 per gram. This week’s price equates to US$2,030 per pound at the current exchange rate.

This week, Cannabis Benchmarks reviewed the number of federal licenses issued for cultivation and processing in Canada’s legal cannabis market. Cannabis Benchmarks has examined and cleaned up license records maintained by Health Canada, and provides this license database, along with other proprietary data, to members of their Price Contributor Network.

Health Canada has been very busy issuing cultivation and processing licenses since medical cannabis was legalized in 2013. The chart below shows the uptick in licenses issued ahead of recreational legalization, which was approved in 2018. It also illustrates the fact that there was no slowdown in new licenses issued even during the COVID-19 lockdowns that occurred earlier this year. 308 cultivation licenses have been issued to date. Ontario is the province home to the largest proportion, with almost 40% of the total, while Aurora is the firm with the most licenses, at nine.

It is likely that most of this production capacity is not being utilized. This is a good thing in light of the large overhang of finished and unfinished inventory in the regulated system. Based on the latest data from Statistics Canada and Cannabis Benchmarks’ assessment of current demand, the amount of unsold inventory in Canada’s licensed market constitutes 39 months’ worth of supply.

Source: Canada Cannabis Spot IndexCannabis Benchmarks

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